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The Universe is An Insane Place! To show how crazy it is, I will tell you an event that happened when I was in my twenties.

Am a male and almost 20 years ago I answered a share-the-ride-and-gas advert on Craigslist from Kelowna to Vancouver from a female who picked me up at a mall on the Kelowna side. All I had was munchies and drinks to share and my backpack.

We met and exchange initial pleasantries and I had a note of familiarity as if I had met her before. I made a verbal note to her and asked we had met before. She smiled and laughed but merely mentioned her first name and that we may have seen other around town. I didn’t push it any further so we got in the car after she mentioned she was in a hurry to get to a flight in order to get to her home country and a family celebration. She spoke almost perfect English with only a typical mainland Europe accent that I couldn’t quite place.

During the drive we shared a lot about ourselves personally but she didn't want to get into details of her current job so i didn't push it. I also showed her my mix CD’s and told her I was a metal fan to which she was really surprised at that, noting that she was a big fan herself. I played multiple CD’s on the drive and we headbanged all the way to Granville and 70th in Vancouver where I was going.

All the way there I was trying in my mind to recognize her but just couldn’t get it. Anyways, during the drive we talked about everything under the sun and kinda started to figure out we were open to meeting up again and I just gave her my phone number and email address.

She said she'd be back in Canada sometime soon and would love to meet up with me again. Seemed like she really meant it too when she dropped me off near a gas station at 70th n Granville.

No email after a few weeks so I forgot all about it until a few years later during a long vacation to Europe with some friends where we ended up at a major music festival in Germany.

I was STUNNED to see HER again in all her glory on stage fronting one of the biggest metal bands ever! What a total shock to see my Kelowna-to-YVR ride-share singing to 80,000+ people!

If you are a metal fan YOU KNOW HER NAME and her band! I wasn’t anywhere near the front of stage so there was no chance to get her to recognize me. She's still famous 20 years later!

That’s my story about meeting an angel and star in disguise!

Katherine Lynch: As investors, it's important to know how the investments in our portfolios make an impact. One way to look at this is through the lens of climate change.

Carole Hodorowicz: Climate change has become one of the biggest systemic risks to the financial markets for investors. In 2021, the level of emissions, like carbon, have reached record highs. These emissions are causing global warming. 

Lynch: Many investors choose to build sustainable portfolios, or invest in companies that are helping solve environmental and social challenges. Building a sustainable portfolio can be overwhelming at first. Here are four steps investors can follow so they can make real changes with their portfolios. 

Hodorowicz: Step 1: Discover what sustainable investing means to you. What sustainable goals do you have? 

Lynch: Step 2: Understand what’s already in your portfolio. If you want to monitor your climate impact, you might want to ask yourself: Do the funds I invest in have holdings that ally with my desire to reduce carbon emissions? 

Hodorowicz: Step 3: Know what sustainable options are available to you. For example, if you’re looking for a hands-off approach, consider a passive sustainable fund.

Lynch: Step 4: Make a plan for transitioning your portfolio. There are several factors to keep in mind, such as your overall risk and return objectives and tax implications. Most investors benefit from taking a gradual approach. 

Hodorowicz: Still don’t know where to start? Go to Morningstar.com to explore our research, use our ESG screener to find investments that fit your needs, and more. 

We found an old children’s magnet game in a cupboard recently – the type that has all the little magnetic shapes to build different structures and connected chains. We reminisced about how we used to use the magnetic balls to repel other magnetic shapes away, and the satisfaction gained when two repelling magnets were forced together.

Developing a portfolio strategy can sometimes feel like this; like you have just been handed a bag of repelling magnets and asked to fit them all together. Despite this level of challenge, over the course of the last few years we have seen an incremental shift from a brand strategy approach, to a more holistic portfolio strategy approach across many pharma and biotech companies. This shift has fundamentally impacted notjust the way business units in pharma are now strategising, planning, executing and training, but also the structure of teams and organisations, and their budgeting and resourcing.

So, what is the intrinsic value that big pharma companies have found in rethinking the way their business is structured to reflect this new approach? There are a number of clear advantages to thinking ‘portfolio first’.

The first benefit that always springs to mind is that this must help drive a financial advantage and, yes, a portfolio focus can often unlock financial opportunity to create synergies across brands; not just with people and teams but also through investment and resource allocations with a subsequent impact on ROI. Basically, where the synergy is possible due to common ground, the business will leverage the same resources across different brands, embracing a more efficient approach.

A second, but no less important benefit is the focus portfolio strategies can achieve. Creating and managing a P&L for a portfolio certainly helps the process of prioritisation, which can be very challenging when considering individual brand strategies. With a brand strategy approach, each brand team will always emphasise how critical some activities are versus other brands. We have heard that this has even led to bitter arguments about budget within different brand and functional teams, but if there is ever any competition to be had, it should always be external and not from the person at the next desk!

But not all the benefits of a portfolio approach are internal – there are some very strong external and customer-focused benefits.

By putting ourselves in the customer’s shoes, we can realise how much further ahead healthcare professionals are in the way they see the portfolio versus brands. Healthcare systems need to look across populations, with many patients experiencing multiple (and often unconnected) health issues and conditions at the same time. We should be working collaboratively at a portfolio or disease level so that we are being exposed to the ‘real-world’ challenges of health population management and the value our solutions can offer rather than remaining focused on programmes connected to just one brand. That isn’t to say that there isn’t still a role for understanding more about specific brands and who would benefit from each, but we also need to elevate our gaze to a longer-term, portfolio or disease-focused set of solutions.
There are a number of companies making some very smart decisions about portfolio and disease offerings and engagement and are reaping the benefits of enhanced relationships and reputation, as well as experiencing commercial gains from this strengthened customer engagement.

We should be honest here and make it clear that there can be a lot of pain before a company or team is able to appreciate the gain of a portfolio strategy. The component brands within a company portfolio may have been developed in near isolation from the rest of the assets and brands produced by the company. This is when it can sometimes feel like trying to push two repelling magnets together. The scientific narrative of the component brands can feel awkward and disconnected, the budgets may be maintained separately, resources can be duplicated and require untangling, team objectives and incentives can be counter-intuitive to a portfolio or disease approach and so the list goes on. It can often require a full company transition, as a local country team attempting this transition alone may find itself disconnected from its affiliate structure and policies, let alone distanced from regional and global teams.

If you are not scared off after the list above, our recommendation on how and where to start is always to look at the vision of what this could be and build that collaboratively with the impacted team. If we were to be successful in developing and implementing a portfolio strategy, what would that mean to our team, our company, customers and healthcare systems, patients and carers and, ultimately, society? How would this feel? What would we be able to observe? Once this longer-term view is mapped out, the team can explore what will stop or slow this progress, what will need to change, what will enable change, and so on, as the
plan for how to transition becomes clearer.

Brand strategy will always be needed. Even within a wider portfolio or disease strategy, it is always important to know the component parts and what is needed to maximise all parts that make up the whole. However, sometimes by working to connect the brand ‘magnets’ together we can build extraordinary structures that help us realise the internal and external benefits to be gained.

Maxine Smith is Managing Director and Laura Fontana Sabatini is a Senior Consultant, both at Uptake Strategies

Innovation & Product Enterprise Practice Manager at AWS - Re-Inventing companies to become Product Driven, Innovative and Customer Centric

As an innovation and product thought leader, I get pulled into many related opportunities where companies are looking to Excellerate their growth trajectory or maintain market share and dominance. The early conversations and discovery processes frequently reveal that whether through organic growth, M&A, environmental shifts or pivoting strategy, the product portfolio is strained, the operating model is not fit for purpose and there are differing views as to why and how to fix it. What commonly happens then is the initiation of a new innovation project to drive growth. Thus begins the journey with the annexation of a team to focus on an innovation opportunity augmented by consultants.

The new team gains some notoriety within the organization, explores the problem and eventually produces a prototype or MVP. Management teams compare how well this team has obtained results compared to their existing workforce—many times with contempt now for the existing workforce that didn't produce the result or could have produced it in the same short time. This moment is celebrated, press releases are formed, and people feel great about their achievement—whether or not the experiment actually implemented the top line. Then, the consultancy firm might go off and repeat the program with another customer while the original customer is left to pick up the pieces of the deflation in the division it can leave behind.

I'm not saying this scenario is inevitable, but it is common. I've seen this method launch many new products well, but the problem is that this approach doesn't really yield a long-term impact to sustain growth or innovation. This is a tactical innovation response, not a strategic one. Tactical innovation solves a very targeted need for a specific problem but doesn't solve the problem of developing a lasting innovation capability that is repeatable across a wider company. For that, you need a strategic solution that looks at your wider portfolio underpinned by vision, leadership, culture and the supporting mechanisms and ways of working.

To transform, you need to think bigger and look at your portfolio—an approach that doesn't just solve the problem of today and tomorrow but will help you create long-term success by developing innate capabilities for perpetual innovation. The following three areas can support you in targeting that journey.

1. Review and transform your operating model.

To create a sustainable and scalable solution for innovation to thrive, you need to actively measure and manage your operating model. An operating model in this context involves the organizational design, culture, people, processes, mechanisms, rewards/incentives, governance and more. This operating model will likely benefit from taking a product alignment approach centered around the customer (product operating model), where divides between functions are diminished. That means a unified operating model where business and technology functions work as one to create, measure and maintain customer and business value.

When evaluating your existing operating model and assessing innovation and product capabilities, don't shortcut the process. Context matters, and spending the time to interview teams, leaders and customers as well as reviewing existing governance is a timely but worthy endeavor.

2. Map your portfolio and connect your organization.

A common observation across countless enterprises is the inconsistency or absence of effective portfolio management as well as subsequent processes and interfaces to connect your board-level visions and strategy to delivery and execution performance. The ERP can be a fountain of knowledge for financial performance but often fails to merge related data from operations and/or has restricted access to the confined employees under the CFO with permitted licenses. Fragmenting that further, the CRM, IoT platforms and other EPM solutions are biased to the view of the function that manages them, and it's rare that a consolidated view of the product portfolio is in place and managed as a cross-functional team.

To architect meaningful and strategic product portfolios, it's vital that time and effort are spent putting in place and managing a coherent product and platform taxonomy—thus ensuring that the portfolio can be measured and compared fairly but also extended with a product lifecycle governance framework underpinning the portfolio itself. This lifecycle governance can allow you to strategically manage and understand how innovation strategy is performing by applying contextual governance for performance and investment at lifecycle stages. With this in place, you should be looking to have a versatile organization and portfolio that is highly capable of business model exploration and discovery using innovation accounting and is distinctly different and equally good at executing said business models as well as looking for incremental growth and adjacency.

3. Implement transformation and portfolio management teams for a lasting effect.

With an evolved product operating model, new portfolio management capabilities and a path of implementation in place, success will depend upon sustaining change beyond the first state change. A transformation team that can help implement and support a change will be required, with the supporting goals to incentivize change distributed through the related areas. Beyond that, it's recommended that cross-functional product investment councils are established to actively manage and maintain the product taxonomy, portfolio and lifecycle. This can be layered in the organization if needed from the business unit to regional or divisional elements—ultimately reporting to a board-level equivalent.

Thinking beyond the tactical to include a strategic response to innovation and growth is not for the faint-hearted, but it can likely yield much wider and longer-term financial results. That's not to say that ways of working to Excellerate the tactical capabilities to innovate are not required, but what's most important is to elevate up from product to portfolio. Thinking about how you transform and sustain innovation at a portfolio level can allow you to spread innovation across the market and govern in a more adaptive way, making your organization as a whole more agile, innovative and opportunistic.

Forbes Technology Council is an invitation-only community for world-class CIOs, CTOs and technology executives. Do I qualify?

How to know when to rebalance your portfolio

The big piece that can come with rebalancing your portfolio is tax-loss harvesting.

Ashton Lawrence

partner at Goldfinch Wealth Management

watch now

Reconsider your risk tolerance

Sponsored Post: It could be time to start examining our growing reliance on public cloud platforms. Let’s start by asking a few honest questions about the true value of the cloud model. About how much it is really costing us, what it delivers versus what it promises, and whether all the messages coming out of the powerful public cloud sector make good business sense for everyone.

This candid and probing approach to cloud is at the heart of a new movie from independent film production company Dark Matter. Called Clouded and backed by tech vendors HPE and VMware, the film takes an ‘anthropological look’ at the culture of the cloud industry.

Cloud, of course, is an umbrella term that takes in a multitude of technologies and usage modes. And that might be part of the problem. One of the central issues the film identifies is that the complexity of today’s cloud deployments is making it hard to draw clear-eyed economic conclusions about their real value. Ironic, given that simplicity has always been one of cloud’s selling points.

Are organisations being seduced into moving essential applications from on-prem to a public cloud platform, but then not realising the efficiencies and savings that they were promised? It may just be, contends Clouded, that the sheer ease of the initial service procurement has blunted the rigour which IT departments once applied to every tech decision by default. Perhaps the avalanche of hype and the sugar rush of outsourcing all that responsibility have muddied judgments and obscured initial objectives.

Our reliance on the cloud, far from being soberly measured and questioned, appears to be galloping ahead like a runaway horse. Tech analyst firm Gartner says that as much as 45 percent of global IT spend will be on public cloud by 2026, up from less than 10 percent in 2018.

The film also shines a spotlight on the cartel of hyperscalers that dominate the market. The three main players – Google, AWS and Microsoft – arguably enjoy too much market power. UK regulator Ofcom seems to think so. It’s set to scrutinize the country’s £15 billion cloud services market, warning it will act if competition concerns are identified.

We should probably also consider whether these public cloud monoliths have answers for the growing concerns around data and cloud sovereignty that are troubling organizations all over Europe. And what about the exponential growth in compute now needed at the network edge? Do ‘cloud first’ strategies based around highly centralized pools of critical data play well within that scenario?

It might be preferable, posits the movie, for tech and compute decisions to be based around intended outcomes rather than a default cloud-centric technology policy. Surely a hybrid model, encompassing both on-prem and distributed cloud tech, is the most sensible stratagem.

You decide – Clouded had its premiere on the 18th of October at London’s Ham Yard Hotel and you can watch a trailer here.

Sponsored by HPE & VMware.

This was a relatively flat week as the S&P 500 declined by -0.46%, while the Nasdaq declined -0.74%. Week 90 has come to an end, and the Dividend Harvesting Portfolio's invested retraced to $8,862.08, down -1.53%. In week 89, the Dividend Harvesting Portfolio put itself in a position to cross over back into positive territory but came up a bit short. That's perfectly fine as I continue to allocate $100 each week toward this project, reinvest each dividend that is generated, and increase my projected annual income.

Nobody knows when the market will turn, but the Dividend Harvesting Portfolio has proven it can withstand volatility and not break down during a bear market. By sticking to my investment principles, being well diversified, and not overextending into a single position or sector, the Dividend Harvesting Portfolio has allowed me to sleep well at night and generate income every week throughout 2022.

Alright, week 90 has ended, which was reader suggestion week. There were some really good suggestions made, and some interesting ones are still on my watchlist. The new additions to the Dividend Harvesting Portfolio are the Schwab U.S. Dividend Equity ETF (SCHD), and PIMCO Dynamic Income Opportunities fund (PDO). I had some capital left over from last week, and with the remaining cash after adding SCHD and PDO, I added an additional share of New York Community Bank (NYCB).

The Dividend Harvesting Portfolio is now generating $670.24 in projected annual income, which is a forward yield of 7.56%. I have collected $414.48 from 462 individual dividends in 2022. I have 12 positions that are generating at least 1 share per year from their dividends and another 13 positions generating between 50-90% of their share value annually through dividends. Over the next several weeks, unless something catches my eye, I am going to focus on getting at least 8 of these positions to the point where their annual dividend income generates at least 1 new share annually. Once these 13 positions all cross over the 100% threshold, I plan on focusing on the bottom half of the portfolio and amplifying the snowball effect.

I allocate capital toward big tech, funds, dividends, and growth outside of my retirement accounts. These are not my only investments, but I did open a separate account, so I could easily track and document this series. I intentionally created broad diversification throughout the Dividend Harvesting portfolio so I could benefit from sector rotations and mitigate my downside risk. Investors who are too exposed to growth companies or large-cap tech have gotten crushed as the investment landscape changes. On the growth and tech side of my investments, I am feeling the pain as some of my favorite companies, including Alphabet (GOOGL, GOOG), Amazon (AMZN), and Meta Platforms (META), have been taken to the woodshed.

I am going to address a question that continues to surface. I am not trying to beat the market with this portfolio. I love index funds and am invested in several index funds. I love dividend investing due to the stream of cash flow it generates. I don't want 100% of my assets outside of real estate tied to an S&P index fund. I have created a personal investment strategy that works to achieve my investment goals, and having a stream of income generated from dividends is part of my investment strategy. Low-cost index funds are one of the best investments anyone can make in my opinion, and the Dividend Harvesting portfolio is not meant to be a substitute for an index fund. I have read many questions about dividend investing and wanted to start a portfolio from the ground up and document its progress to disprove many misconceptions, including that you need a large amount of seed capital to make dividend investing work for you.

This series has never been about hitting a target yield, generating a certain amount of profit, or beating the market. I had two specific goals with this series. The first was to create a blueprint for constructing a dividend portfolio by documenting the journey starting from the beginning. The second goal was to illustrate how allocating capital each week toward investing, regardless of the amount, would be beneficial in the long run.

Too many people are under the illusion that you need tens of thousands or even hundreds of thousands to benefit from investing. Instead of using my real dividend portfolio as an example, I decided to start a new account, fund it with $100, and add $100 weekly, providing a step-by-step guide to dividend investing. This methodology doesn't have to be used for dividend investing, and it could be as simple as an S&P index fund or a Total Market fund. Hopefully, this series is inspiring people to invest in their future to attain financial freedom.

A Historical Recap of the Dividend Harvesting Portfolio's Investment Principles and Historical Performance

Investment Objectives

• Income generation
• Downside mitigation through diversification
• Capital appreciation

Below are the fundamental rules I have put in place for this Portfolio:

• Allocate $100 weekly to this Portfolio
• Only invest in dividend-producing investments
• No position can exceed 5% of the Portfolio
• No sector can exceed 20% of the Portfolio
• All dividends & distributions are to be reinvested

Below is a chart that extends from week 1 through the current week to illustrate the Dividend Harvesting Portfolio's Progression

• Blue line is my initial investment $100 in week 1, $1,000 in week 10, etc.
• Red line is the account value at the end of each week
• Yellow line is the annual dividend income the Dividend Harvesting Portfolio was projected to generate after that week's investments and dividends reinvested

The Dividend Harvesting Portfolio Dividend Section

Here is how much dividend income is generated per investment basket:

• Equities $210.38 (31.39%)
• ETFs $156.08 (23.29%)
• REITs $134.65 (20.09%)
• CEFs $128.35 (19.15%)
• BDCs $40.58 (6.06%)

Collecting dividends can serve many functions in a portfolio. Some investors utilize dividends to supplement their income and live off. I am building a dividend portfolio for myself 30 years into the future. Since I am reinvesting every dividend, they serve multiple purposes today. In 2022 alone, I have collected $414.48 in dividend income from 462 dividends across 46 weeks. This has allowed the Dividend Harvesting portfolio to stay in the black while growing the snowball effect.

These dividends allow me to gain additional equity in my investments while increasing my future cash flow in down markets. This style of investing isn't for everyone, but if you're looking to generate consistent cash flow while mitigating downside risk, this method has worked for me. I am hoping to collect between $450 and $500 in dividends in 2022, which will be reinvested, and finish the year generating >$700 in annual dividends.

October is in the books, and Thanksgiving is almost here. I am excited for 2022 to come to a close so I can see how much dividend income was generated and what the remaining YoY numbers look like.

The Dividend Harvesting Portfolio added 2 positions in week 90. SCHD pays a quarterly dividend, while PDO pays its dividend monthly. The Dividend Harvesting Portfolio now has 604 individual dividends flowing through its portfolio on a weekly basis. When I look at the grid below, it's surreal, and I am excited to see what it looks like this time next year.

The goal of generating enough income from the dividends to purchase an additional share per year has been the never-ending project of this portfolio. There are now 12 total positions generating at least 100% of their share value in dividends within the Dividend Harvesting portfolio. This could fluctuate due to market volatility, but I am looking to have as many positions generating at least 1 share annually from their dividends as I can.

The Dividend Harvesting Portfolio Composition

Many of the readers have asked if I could break down the individual positions within these sectors. I created pie charts for each individual sector and have illustrated how much each position represents of that sector of the Dividend Harvesting portfolio. Since I only have 1 position in Food & Staple Retailing and Industrials, I did not make a chart for those. 3M (MMM) and Walgreens Boots Alliance (WBA) represent 100% of those sectors. The charts will follow the normal portfolio total I have constructed. Please keep the ideas coming, as I am happy to add as much detail to this series as I can.

In week 89, REITs remained the largest segment and grew a bit closer to my 20% threshold for an individual sector weight within the Dividend Harvesting Portfolio. Individual equities make up 45.43% of the portfolio and generate 31.39% of the dividend income, while exchange-traded funds ("ETFs"), closed-end funds ("CEFs"), real estate investment trusts ("REITs"), business development companies ("BDCs"), and exchange-traded notes ("ETNs") represent 54.57% of the portfolio and generate 68.461% of the dividend income.

I have a 20% maximum sector weight, so when a singular sector gets close to that level, I make sure capital is allocated away from that area to balance things out. In 2022, I will make an effort to even out these portfolio percentages. As more capital is deployed, the bottom half of the portfolio weighting will increase.

In week 90, INTC retained the top spot as the largest allocation in the Dividend Harvesting Portfolio. INTC going above $30 has pushed it close to my 5% threshold, as it's now 4.45% of the Dividend Harvesting Portfolio. I will be paying close attention to this as the week's progress.

Week 90 Additions

In week 90, I added the following positions to the Dividend Harvesting Portfolio:

• Schwab U.S. Dividend Equity ETF (SCHD)
• PIMCO Dynamic Income Opportunities fund (PDO)
• New York Community Bank (NYCB)

Schwab U.S Dividend Equity ETF

• SCHD has been recommended by numerous readers throughout the series. I am currently a shareholder of SCHD on the ETF side of my portfolio, and SCHD has now found a new home in the Dividend Harvesting Portfolio. It's hard to go wrong from a dividend perspective with SCHD. SCHD has a forward yield of 3.22%, and has increased its dividend for 9 consecutive years. Investors have been rewarded through a dividend growth program that has a 12.10% average growth rate over the past 5-years.

PIMCO Dynamic Income Opportunity Fund

• I ended up adding PDO to add a further layer of diversification and expand my investment base outside of individual investments I can make on my own. PDO is a fixed-income, multi-sector CEF that focuses on high-conviction income-generating ideas across credit markets to seek current income as a primary objective and capital appreciation as a secondary objective. The fund will normally invest at least 25% of its total assets in mortgage-related assets issued by government agencies or other governmental entities or by private originators or issuers. The fund may invest up to 30% of its total assets in securities and instruments that are economically tied to "emerging market" countries; however, the fund may invest without limitation in short-term investment-grade sovereign debt issued by emerging market issuers. The fund may normally invest up to 40% of its total assets in bank loans (including, among others, senior loans, delayed funding loans, covenant-lite obligations, revolving credit facilities, and loan participations and assignments).

New York Community Bank

• I had around $14 left in the account, and NYCB is on the list of companies I am trying to increase its annual dividend income from to generate at least 1 share per year from its dividends. I wanted to own more of NYCB anyway, so it worked out.

Week 91 Gameplan

I am leaning toward Owl Rock Capital Corporation (ORCC), Omega Healthcare Investors (OHI), and the Global X S&P 500 Covered Call ETF (XYLD) in week 91.

Conclusion

I really enjoyed the suggestions in the weeks leading up to week 90 and added SCHD and PDO to the Dividend Harvesting Portfolio. The Dividend Harvesting Portfolio is now generating over 600 individual dividends annually and is on its way to exceeding $700 in projected annual income. I am looking forward to how this project progresses and finishes in 2022. Please leave me suggestions for new positions and sections of the article below.

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